Will Millennials Eventually Buy Instead of Rent?

MIAMI—There's no lack of discussion about how Millennials are impacting the multifamily market. The general consensus is that this demographic prefers to rent instead of buy, but could that change?

That was one of the topics in the Industry Leaders: Vital Signs panel at RealShare Apartments East in Miami last week. Doug Bibby, president of the National Multifamily Housing Council, moderated a discussion between Jeff Day, CEO of Berkely Point Capital, Gary Goodman, senior vice president of acquisitions at Passco Companies, Frank Guzikowski, executive vice president and director of Agency Lending for Grandbridge Real Estate Capital, Jon Mettel, vice president of Product at B2R and Steve Patterson, president and CEO of Related Development.

“I remember the 70s with the Baby Boom generation—rents were escalating pretty dramatically,” said Mettel. “As these Millennials enter the rental pool and push up demand, it's going to be another wave like that. Plus you have the retiring Baby Boomers and I think more and more they will become a factor.”

The big question is this: Will Millennials eventually shift from renting to buying? Guzikowksi thinks the answer is yes. As he sees it, many Millennials are “underemployed.”

“They'd like to have better jobs so they'd like to stay flexible so they can move on when that better job come,” Guzikowski said. “I think when their situation improves, and it will over time, that's going to happen eventually. They are not going to want to stay in the urban core when they have a family. They are going to want to move out in the suburbs.”

Stay tuned to GlobeSt.com for more insights from this and other panels in the days ahead. In the meantime, check out these articles: Do Multifamily Investors Dig Tertiary Markets?; The Most Important Multifamily Factor of All?; and Why Multifamily Overbuilding is Not a Big Issue.